Netflix Q1 Profit Beats Expectations Due to WBD Deal Compensation, but Stock Falls
Netflix reported a first-quarter net profit of $5.28 billion, significantly surpassing analyst expectations of $3.29 billion. However, this figure was artificially inflated by a $2.8 billion compensation payment received from Paramount Skydance following the termination of takeover negotiations with Warner Bros. Discovery. Excluding this one-time gain, the actual profit of $2.48 billion fell below estimates. Revenue slightly exceeded forecasts at $12.25 billion compared to the expected $12.18 billion. Despite the headline profit beat, Netflix shares dropped more than 8% in after-hours trading on Wall Street, reflecting investor concern over the underlying operational performance. Additionally, the company announced that co-founder and board chairman Reed Hastings will not seek re-election at the June general meeting, marking his final departure from the group. Hastings, who co-founded Netflix in 1997, had already stepped down from operational roles in 2023. The failed bid for Warner Bros. Discovery ended in February after Paramount Skydance increased its offer, leading to the substantial breakup fee paid to Netflix.
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Netflix Q1 Profit Beats Expectations Due to WBD Deal Compensation, but Stock Falls
Netflix reported a first-quarter net profit of $5.28 billion, significantly surpassing analyst expectations of $3.29 billion. However, this figure was artificially inflated by a $2.8 billion compensation payment received from Paramount Skydance following the termination of takeover negotiations with Warner Bros. Discovery. Excluding this one-time gain, the actual profit of $2.48 billion fell below estimates. Revenue slightly exceeded forecasts at $12.25 billion compared to the expected $12.18 billion. Despite the headline profit beat, Netflix shares dropped more than 8% in after-hours trading on Wall Street, reflecting investor concern over the underlying operational performance. Additionally, the company announced that co-founder and board chairman Reed Hastings will not seek re-election at the June general meeting, marking his final departure from the group. Hastings, who co-founded Netflix in 1997, had already stepped down from operational roles in 2023. The failed bid for Warner Bros. Discovery ended in February after Paramount Skydance increased its offer, leading to the substantial breakup fee paid to Netflix.
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